Bears rookie defensive tackle Gervon Dexter has filed a lawsuit against Big League Advance Fund to void a contract he signed that gives 15% of his pre-tax NFL earnings to the speculative investment capital company.
Big League Advance provides funding for athletes in college and baseball’s minor leagues in exchange for a return of future earnings. Dexter signed the contract at Florida last year.
According to e lawsuit, Dexter received $436,485 from Big League Advance in exchange for 15% of his pre-tax NFL earnings for 25 years. Dexter, a second-round draft pick (No. 53 overall), signed a four-year, $6.7-million dollar rookie contract with the Bears, including a $1.9 million signing bonus and $3.7 million guaranteed overall.
Dexter’s lawsuit argues that the agreement violates Florida’s NIL (name, image, likeness) Statute enacted in 2021, in addition to “the NCAA’s rules and regulations, and the University of Florida athletic department’s rules, regulations, and by-laws.”
According to Florida’s NIL Statute, “The duration of a contract for representation of an intercollegiate athlete or compensation for the use of an intercollegiate athlete’s name, image, or likeness may not extend beyond her or his participation in an athletic program at a postsecondary educational institution.”
Big League Advance, a company started in 2016 by Michael Schwimer, a pitcher for the Phillies in 2011-12, established itself with mostly minor-league baseball players. But it expanded its scope to sign college football players last year — including Dexter, Georgia edge rusher Nolan Smith and Arkansas’ wide receiver Jadon Haselwood.
Smith, a first-round draft pick (No. 30 overall) by the Eagles, signed a four-year, $12 million guaranteed contract — a percentage of which goes to BLA. Smith currently has a video testimonial promoting BLA on the company’s web site.
The company recommends that players consult with “legal counsel, a financial advisor, agent and family members” to review the contracts before signing them.
Big League Advance has been accused of usury, predatory lending/investment policies that take advantage of vulnerable athletes in the formative stages of their careers.
Schwimer has argued that the company’s payment to a prospect is not a loan and does not have to be paid back if the players does not make it to the NFL or the major leagues. So there is risk for the company as well. They fail on many investments in search of lotto winners.
But to critics, it’s an unseemly business model. Agent Scott Boras has accused BLA of taking advantage of low-paid prospects from Latin America. “The idea of giving millions in lump sums to a player is the justification of candy used to attract and compel players to give up huge percentages of their careers,” Boras told the Associated Press.
San Diego Padres star Fernando Tatis, Jr., who signed a 14-year, $340 million contract in 2021, must give a percentage of that deal — reportedly as much as $30 million — to BLA because of a contract he signed when he was a fledgling minor-league player. Like Nolan Smith, Tatis’ father, 11-year big-league veteran Fernando Tatis, has a video promoting the BLA on the company’s web site.
Tampa Bay Rays catcher Francisco Mejia sued BLA in 2018 to nullify a contract he signed at 20 that gave the company 10% of his future earnings for 20 years. He later dropped the lawsuit, apologized to Schwimer and BLA, and paid up.